Monday, November 12, 2012

SPX Daily/Weekly

SPX Daily

SPX Weekly

Monday Afternoon "Hey Cisco ..."

CSCO Daily Chart (11:30 AM)
John speaks tomorrow after market.  CSCO has gapped on the last two earnings reports; down once and up once.  Do you feel lucky, punk?

Monday Morning

Gator's Chart of the Day: CAB
Since the election last week (you may have heard about it ... it was in the papers for a couple of days) sales of firearms have been hot.  The stocks of Sturm Ruger (RGR) and Smith & Wesson (SWHC) were very active and finished the week with impressive gains.  Many of those weapons were sold at Cabela's (CAB) and it looks like it could make a move higher from here.

CAB reported earnings Oct. 25th and the market was not impressed.  The stock dropped nearly 20% and has been basing for the last 9 sessions.  That's not a lot of trading but last week we saw more green candles than red and with a P/E under 15 the stock is not expensive.  Analysts have the price target set at 56.

The Trade
I'm not real excited about this one so I would not recommend a big position.  Assuming the stock is somewhere in the 45 - 45.50 range I would take a 1/3 bite and put the stop just below recent support and 43.25 looks about right.  That would be about 5% below the entry and the first target price is the bottom of the Oct. gap which is 50.95.  That's about 12% above the entry.  If the stock makes it into the gap it could add another 3 points which would be about 19% above the entry.

Assuming the stock moves higher it looks like the first add would be about 46.20 and the position should be full if it clears 47.  Unless you intend to hold a core position for the long term (6 months or more) I would move stops up to insure no loss on this trade and I would let tight trailing stops take me out of the trade as it reaches 56.